France told by EU to raise VAT on digital news to 20%

There are reports today in the French press that the European Commission is set to compel France to change back the French VAT rate on digital news to the standard VAT rate of 20%. The EC is requiring France to respond by September.

Whilst EU member states are free to set their own VAT rates, the EU VAT Directive gives rules on any reduced rates. At present, whilst there is provision for the application of reduced rates on printed news and books, this has not been extended to similar digital news.

The Finnish government recently asked the European Court of Justice for clarification of this point, and the ECJ ruled that the EC was correct is requiring a differentiation.

Richard Asquith is VP Global Indirect Tax at Avalara, helping businesses understand their compliance obligations as they grow globally. He is part of the European leadership team which this year won International Tax Review's Tax Technology Firm of the Year. Richard qualified as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.